Taking A Big Piece Of The Corporate Pie

Any Way You Slice It, The Area's Top Bosses Made Top Dollar In '92

May 09, 1993|By BARRY FLYNN Daily Press

While profits rose at some Hampton Roads-based corporations, declined at some and never happened at others during the last fiscal year, the paychecks of most chief executives headed in one direction: up.

The Daily Press' annual compensation survey of many of the publicly traded corporations based in Hampton Roads turned up most of the same faces from last year - all male and all white.

FOR THE RECORD - Published correction ran Tuesday, May 11, 1993.A story in Sunday's Business section incorrectly stated that Smithfield Foods chief executive Joseph W. Luter III received $1.3 million in dividends in 1992 from his shares in the company. Smithfield Foods does not pay a cash dividend.The mistake occurred when a reporter mistakenly assumed that a New York Stock Exchange listing for "SmithFood," with dividends of 52 cents a share, referred to Smithfield Foods. The NYSE citation was for a company named Smith's Food & Drug. Smithfield Foods trades on the NASDAQ exchange.In addition, an accompanying chart incorrectly ranked Norfolk Southern Corp. Chairman David R. Goode third in compensation among top executives of publicly held companies headquartered in Hampton Roads. He should have been ranked second. nVIEW Corp. Chairman William M. Donaldson, incorrectly ranked second, should have been ranked third.

The survey is compiled from proxy statements publicly traded companies are required to mail to stockholders before each annual meeting. This year, thanks to new rules at the Securities Exchange Commission, stockholders have more information on how CEOs' salaries and perks add up.

Because the reports are based on fiscal years that ended in 1992, some of the men in this report either assumed or left the CEO's post during the course of the year.

Norfolk Southern changed chief executives late in 1992.

Tidemark Bank Chairman Gordon Gentry turned the title of CEO over to President Robert N. Springer at the start of 1993, retaining the chairman's post.

And Newport News-based Flight International, the troubled military flight services company, is on its third chief executive since J. Nelson Happy was removed last year and replaced with Frank Wright, a partner in the New York investment company that bought a controlling interest in Flight. Wright was paring Flight's debt and its size when he died of a heart attack last December. Richard Fry was promoted to chief executive in January.

Although being the head man at a big, publicly traded company was a good way to assure oneself a robust income last year, it helped even more to own a big stake in the company as well.

In fact, the chief executive officer of one local company that lost money last year - Newport News-based nVIEW Corp. - was one of the biggest winners in the compensation sweepstakes, thanks to his exercise of stock options.

nVIEW's William M. Donaldson, the chief executive officer, was paid $95,000 in salary last year. But that amount was dwarfed by the $956,000 he realized from the exercise of options on 40,000 shares of company stock. Thus, Donaldson's total compensation was $1.05 million.

But the company, which produces projectors for computers, has been hammered. It lost $2.4 million last year, even more than the gloomy expectations of analysts who follow it. And the stock's price has plunged since the top executives cashed in big parts of their positions.

From a high of $31.50 a share at the end of 1991, adjusted for splits, nVIEW stock was trading last week in the $4.50-a-share range.

Another chief executive who did well by virtue of his stake in the company he runs was Lloyd U. Noland III, chief executive of Noland Co., also based in Newport News. He earned just $96,362 in cash compensation last year. But from the 24-cent-per-share dividend the wholesale plumbing supplies company's stock pays, Noland's 1,838,460 shares brought him another $441,230.40.

Dividends also plumped up the income of the best-paid chief executive in Hampton Roads in 1992: Joseph W. Luter III of Smithfield Foods. Luter's total income from the company in 1992 was at least $2.5 million. He controlled, directly or indirectly, almost 20 percent of the stock of his meat packing company, according to company documents.

Luter, chairman, president and chief executive officer of the Smithfield-based Fortune 500 company, made some $2.5 million last year.

He got $1.2 million cash in salary and bonuses during fiscal 1992, which ended last May.

His salary and bonuses amounted to a raise of $236,701, or more than 25 percent, from the $937,336 he had pulled down the previous year.

And that's before counting the 52-cent-a-share annual dividend he received from his 2.2 million shares in the company, which make him Smithfield Foods' biggest shareholder.

Those shares brought him another $1.175 million in income.

Also, Luter held an 81 percent interest in a company that, in turn, owned some 325,000 additional shares in Smithfield Foods. His portion of dividends from that holding would be $136,890.

His pork-packing company did not fare so well. In the same fiscal year, Smithfield Food's sales were off about 2 percent and earnings fell almost 25 percent from the previous fiscal year.

In fairness to Luter, 1992 was a tough year in the pork-packing business, because of an oversupply of pork that pushed supermarket prices down. Indeed, some of Smithfield's competitors ended the year in the red.

Even without considering his dividend income, Luter nosed out the new chairman at Norfolk Southern Corp., David R. Goode, by about $100,000 for the top spot among high-paid chief executives in Hampton Roads.

Goode, who had been president of the Norfolk-based railroad company since the year before, became chairman and chief executive officer in September and thus held those posts just for the last four months of last year. He received $1.1 million for the year.